China trading ban fuels rise of ‘crypto coin’

Bloomberg

Cryptocurrency investors better not take their eyes off China, even after regulators there started to crack down on digital assets.
In recent months, over-the-counter crypto trading in China has exploded, just as Chinese spot traders began buying nearly all of their Bitcoin with the stablecoin Tether, according to a study by researcher Chainalysis Inc. Tether was used in 99% of Bitcoin spot trades in China this year, almost completely displacing the yuan, while Bitcoin trading in markets like Japan and Korea is still mainly conducted through fiat, the researcher found.
About 40% of the top-50 crypto exchanges in terms of Bitcoin on-chain activity are located in the Asia-Pacific region, according to Chainalysis. In the first half of 2019, these exchanges accounted for 35% of all Bitcoin received. The region’s exchanges also dominate the trading in options and futures, with nearly 90% of the 2.36 billion contracts traded globally.
“People should be paying more attention to the price formation on the large Asian exchanges,” said Philip Gradwell, chief economist at New York-based Chainalysis.
“There’s probably going to be a large amount of liquidity there that, for example, these OTC brokers will be providing. It can move very fast.”
Binance, the world’s largest crypto spot exchange, just launched a peer-to-peer yuan-trading service in China.